Portuguese Golden Visa – Investment Route and the Non-Habitual Residents Regime
Background
Portugal is being re-discovered as a destination to relocate to, with iconic cities such as Lisbon and Porto, and stunning coastal areas, for example, the Algarve. It also offers very easy access to the rest of Europe.
Portugal is increasingly recognised as an international hub with 71 Double Taxation Agreements and 49 Investment Protection Treaties.
The Golden Visa
There are a number of different criteria that can be met to fulfil Golden Visa obligations, including direct investment into property. An increasingly popular route is the investment fund option whereby individuals can gain a Golden Visa, by investing in a Portuguese Venture Capital Fund.
Key Facts: The Golden Visa Programme
The Portuguese Golden Visa allows individuals to qualify for a residency permit, to live in Portugal for up to five years and does not necessarily trigger Portuguese tax residency. The applicant and his/her family are free to travel within the Schengen area. The Golden Visa also allows investors to work in Portugal if they choose to do so.
Investing in a Portuguese Venture Capital Fund – the Requirements
An investment of at least €500,000 must be made in a Venture Capital Fund with the objective of providing capital for companies. The capital must be injected for a minimum of five years and at least 60% of the investment must be made in commercial companies, with a head office in Portugal.
Taxation
The benefits of investing through a Venture Capital Fund include:
- Withholding tax of 10%, on distribution of the income generated, if the investor is tax resident in Portugal.
- Exemption from withholding tax, on distribution of the income generated, if the investor is not tax resident in Portugal.
- Exemption from corporate income tax when the fund is established and operating under Portuguese legislation.
- 10% tax on capital gains derived from the sale of participation units.
Non-habitual Residents Scheme (NHR)
Portugal also offers an attractive personal tax regime, the ‘NHR’ regime, to EU and non-EU individuals who have not been tax resident in Portugal for the previous 5 years, but who wish to be tax resident in Portugal.
An individual can enjoy the NHR regime for 10 years, after which he/she will be taxed at the standard Portuguese tax rate.
The key advantages are:
- Income derived from employment or independent personal services in Portugal is taxed at a special flat rate of 20% for ten consecutive years, as above. Portuguese employment income must be derived from high value-added activities of a scientific, artistic, or technical nature.
- 28% flat rate of withholding tax on interest, dividends and/or capital gains relating to Portuguese source income.
- Pensions will be taxed at the rate of 10%
- No capital gains on the sale of a permanent residence in Portugal as long as the gains are re-invested in another permanent residence in Portugal or another EU or EEA country.
Comprehensive details are available from Dixcart: advice@dixcart.com.
Additional Information
If you require additional information regarding the Portuguese Golden Visa or the NHR regime, please speak to your usual Dixcart contact or email the Dixcart office in Portugal: advice.portugal@dixcart.com
